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Thursday, November 18, 2010

"Africa can be the next Asia" says Ramos

Africa has the potential and advantages to become the next big success story and emulate the successes of Asia, Absa CEO Maria Ramos said on Tuesday.

However, while Africa had several economic advantages over the rest of the world, it also had to address some major problems, she said in a public lecture at the University of Pretoria.

While it would be dangerous to compare Africa with Asia, she believed the continent could effectively become the Asia of the future.

“We need to expand beyond being just an exporter of resources,” she said.

One positive sign was that increasingly the continent's leaders were focusing on poverty alleviation.

While some might view Africa's young population with concern, she said if it was provided with the right education and skills, it could in future become a competitive advantage as other continents battled with ageing populations. But labour, goods and finance would need to move more freely within the continent than was currently the case.

Education and infrastructure, especially power generation, would be critical in Africa achieving economic success.

The continent would need to encourage greater levels of saving and improve its financial sectors, which would in turn use those savings to further development. A lack of saving also did not encourage foreign investment.

“If we are not saving, then no one else is going to invest in our state,” she said.

African countries need to diversify and use the profits from the commodity boom to reduce dependency on those resources. Ramos cited Nigeria and Angola as examples of countries being overly dependent on a single commodity, namely oil.

If Africa wanted the levels of success achieved in Asia, it needed the determination to invest in education.

She warned against protectionism, saying the most successful countries in history had not closed themselves off to the outside world.